What Is an IEO? Initial Exchange Offerings 2020 Guide

The information provided on this website does not constitute investment advice, financial advice, trading advice, or any other advice, and you should not treat any of the website’s content as such. Initial Exchange Offerings (IEOs) have emerged as a more secure and regulated alternative to Initial Coin Offerings (ICOs) in the cryptocurrency fundraising landscape. Before launching an IEO, it is crucial to analyze your project and the current market scenario. Understand the initial exchange offering news market needs and identify any gaps or problems your project aims to solve.

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Data Availability Sampling (DAS) is a method that enables decentralized applications to verify the availabi… Rollups-as-a-Service (RaaS) allows builders to build and launch their own rollups quickly. A digital currency that is secured by cryptography to work as a medium of exchange within a peer-to-peer (P… By following the tips and understanding the advantages and disadvantages of IEOs, you can navigate the IEO process effectively and increase your chances of success. Next, the project must submit a white paper, which serves as an informative document detailing the https://www.xcritical.com/ technical aspects of the product, its architecture, and the problem it aims to solve. Opting for an IEO often can be an interesting option, assuming the developer has a plan of action and is dedicated to seeing the project’s vision delivered.

IEOs and IDOs: An Evolution in Crypto Fundraising

The primary medium of fund raising for blockchain projects has been the Initial Coin Offering (ICO). Since the first Initial Coin Offering in 2013 by Mastercoin, there have been hundreds of ICOs. At its core, an ICO revolves around a developer collecting contributions denominated in Ether (or some other cryptocurrency), and issuing a newly minted token. Whether or not there is a Smart Contract governing the ICO, the effective counter-party faced by each contributor is the developer himself. Considering that most ICOs failed after launch or saw their tokens drop significantly in value, this is not an overly pessimistic outlook.

Why blockchain projects do an IEO

Exchanges will commonly have a well-organized legal structure that protects them from regulatory consequences. For a young startup seeking initial funding, this is a protection that they normally would not have access to or resources for. Well-developed exchanges can offer legal advice and clarity as well as access to a full legal team to help nascent startups traverse through the minefield that is the blockchain industry.

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In most cases, the IEO proposal is rigorously reviewed by the participating exchange. In some ways, the exchanges put their reputation on the line for every IEO they decide to offer. This small, but significant difference between ICOs and IEOs means that exchanges act as inspectors, curators, and gatekeepers for projects that want to sell their tokens to the public. Having an exchange serve as a mediator between the token buyer and token seller should, ideally, cut down on the rampant fraud and scams that plagued ICOs in the past. For example, capitalization of less than $15 million over a 30-day trading period is grounds for delisting. The board will drop a company that qualifies under the earnings test if its capitalization is less than $50 million over a 30-day period.

• Since the first Initial Coin Offering in 2013 by Mastercoin, there have been hundreds of ICOs.
• Dishonest projects or teams with little business sense will not be able to conduct a successful IEO either, due to the very strict requirements.
• For example, during the Brave ICO, $35 million worth of Basic Attention Tokens (BAT) sold out in less than 30 seconds.
• Binance Launchpad’s first IEO was for Bittorrent Token (BTT) and ended on 29 January 2019.
• Even so, everyone should still do their own thorough research before making any financial commitments.
• If anything, they may be more vulnerable, but exchanges and projects have also learned their lessons.
• The crypto market is generally optimistic about the future of IEOs, foreseeing continued growth and evolution.

After all, the exchange is putting their reputation on the line by facilitating the IEO. Even so, everyone should still do their own thorough research before making any financial commitments. Although blockchain technology is relatively new, there are thousands of crypto startups and companies out there. Many of which are competing to acquire potential investors through ICO or IEO events. Overall, while IEOs present certain risks that investors need to be aware of, they also offer significant opportunities, especially as the market matures and evolves.

A fundraising method in which new projects will sell their cryptocurrency to investors. For a user, an IEO is easy to participate in as they don’t need to manage on-chain transactions with different wallets on different blockchains. Instead, a user only needs an account on the exchange and some funds in their account and can participate completely through the trusted website’s interface.

We review the top IEO platforms including Binance, Huobi, OKEx and more, and show you how to get started. By following these tips, you can increase your chances of launching a successful IEO and attracting the support and investment your project needs. Utilize various marketing channels, such as social media, press releases, and blogging, to create awareness and generate interest in your project. The process of conducting an IEO involves several steps to ensure the project’s legitimacy and investors‘ safety.

We’re endlessly inspired by the people behind these companies, check out their stories below and let’s make something happen together. NYSE’s annual Sustainability Leaders Summit connects our community with sustainability thought leaders who are helping to solve local and global issues. This year’s Summit featured variety of topics including approaches to climate transition plans, strategies for renewable energy and the impact of sustainability measurement on future business decisions. From the perspective of a contributor, instead of sending Ether to a Smart Contract governing the ICO, each IEO participant has to create an account with the exchange and send ETH to this account.

Developers mint the project’s tokens and send them to the exchange, which will then sell the tokens to individual contributors for Ether. Subject to the agreement between the developers and the exchange, conditions traditionally found in an ICO can be emplaced in an IEO. These conditions include capping the contribution per individual and having a fixed price per token. Blockcloud is a blockchain-based architecture that was recently launched on the OK Jumpstart platform as the first IEO venture selling 1 billion tokens and raising a total of 8 million dollars.

However, even Binance’s founder, Changpeng Zhao (aka CZ), admits that they did not invent the concept or the term and were inspired by “centralized ICO” websites that were popular in 2017. The total offering size has increased to over 3.09 billion shares (3,098,671,605) from the previously announced over 2.58 billion (2,582,226,338) ordinary shares. The NYSE looks forward to welcoming more leading companies from around the world in 2024, growing our one-of-a-kind community and setting the pace for innovation on a global scale.

IEOs were first introduced in early 2019 and have since become a hugely popular way to launch new crypto projects. Like an ICO, an IEO involves the distribution of new crypto tokens to either a set of investors or the broader public. However, in an IEO the organization trying to raise funds has to partner with a cryptocurrency exchange, which acts as the facilitator for the actual token sale and distribution. In a typical ICO that takes place on the Ethereum network, the developers create a smart contract and investors send crypto assets to the smart contract in exchange for a set number of tokens at a fixed price. In a typical IEO, developers send their tokens to the exchange, and the exchange sells them to its platform users at a fixed price.

We set the standard with our unparalleled trading platform, enabling entrepreneurs, innovators, and investors to raise the capital they need to change the world. We want to share our vision for good governance, transparency, and trust with our listed community, furthering the responsible development of global business. However, its IEO platform is Bittrex International, which is based in Malta because Malta offers crypto exchanges the regulatory certainty that the U.S. does not. With an ICO, there were generally no fees for either the investor or the token creating teams since projects were sold directly on a blockchain network with no intermediaries. With the IEO, the exchange performs many functions, including serving as the intermediary, facilitator, manager, marketer, and all these services are paid for by the organization that is launching the IEO. The most popular crowdfunding platforms such as Kickstarter, GoFundMe, and Indiegogo, mainly showcase projects from the U.S. and Europe and only accept payments via credit cards and traditional fiat currency.

Perhaps the idealism of the very early crypto adopters was too extreme, and the resistance to centralization is softening in order to accommodate more mainstream users, adopters, and builders. To showcase the due diligence and review process of the IEO system, Bittrex actively removed one of its IEO projects right before it was scheduled to take place. The RAID team had a major partnership that was canceled before the IEO event, so Bittrex decided to cancel the offering. Only 3% of the total 130,000 participants wound up being able to buy the TOP tokens.